StartUp QC’s Cohort 3 offers up to P1-million grant

July 1, 2024 | 12:03 am

Following the success of its previous editions, the Quezon City Government opened applications for Cohort 3 of Startup QC Professional Category.

The program is designed to nurture the next wave of impactful startups propelling economic and innovation growth in the city.

The StartUp QC Program on-boards early-stage startups to enhance their readiness to enter the next stage of their entrepreneurial journey.

Qualified startups will engage in tailored Learning, Engagement, and Development (LEAD) sessions over three to four months and expose them to industry experts, mentors, advisors, and accelerators to help them advance from the prototype stage to develop market-ready products and services, and accelerate their business growth.

The program culminates in a Demo Day, where participants will pitch their innovative ideas to a distinguished audience of stakeholders from the startup ecosystem and will have the opportunity to receive equity-free financial grants of up to P1 million.

This initiative aligns with Mayor Joy Belmonte’s commitment to transforming Quezon City into the startup and innovation capital of the Philippines.

Through collaboration between government and nongovernment entities, the program is seen as a driver of local job creation and meaningful innovation for economic development.

StartUp QC is Quezon City Government’s initiative established under Ordinance SP-3109, S-2022, designed to support innovative startups.

The program is backed by esteemed institutions such as the Department of Information and Communications Technology (DICT), Department of Trade and Industry (DTI), Ateneo de Manila University, Miriam College, Technological Institute of the Philippines, Thames International Business School, University of the Philippines Diliman, and startup accelerators StartUp Village, and Launchgarage.

Startup applicants must have at least one member who is a resident of Quezon City and at least 21 years old. Additionally, program aspirants must have a Minimum Viable Product (MVP) that does not duplicate ongoing programs or projects as determined by the QCGov, and must submit a video pitch of up to 5 minutes along with a business plan not exceeding 10 pages.

StartUp QC Professional Category application ran until June 27.

Some Vietnam coffee farms thrive despite drought, but may not stop espresso price hikes

July 1, 2024 | 12:03 am

PLEIKU, Vietnam — Vietnamese coffee growers have been hit hard this year by the worst drought in nearly a decade, raising concerns of pricier espressos across the world, even as some farmers keep yields healthy with clever countermeasures.

Domestic forecasts for next season’s harvest in Vietnam, the world’s second biggest coffee producer, remain grim. The Mercantile Exchange of Vietnam expects a 10-16% fall in output because of the extreme heat that hit the Central Highlands coffee region between March and early May, according to deputy head Nguyen Ngoc Quynh.

However, a return of rains in recent weeks has improved the outlook, boosting confidence among farmers and officials. But it remains unclear whether the improved weather will help boost output and drive down prices of robusta beans, the variety most commonly found in espressos and instant coffees, of which Vietnam is the world’s top producer.

“I expect the country’s output to fall by 10-15%, but my farm will increase production,” said Nguyen Huu Long, who grows coffee in a 50-hectare plantation in Gia Lai, one of the top coffee-producing provinces in Vietnam.

To protect his trees during the heatwave, he kept the soil around the plants moist by covering it with leaves. Contrary to the local practice of cutting trees after a few years to boost soil quality, he keeps his growing for decades. As a result, plants have deeper roots and broader access to underground water reserves.

Farmers in his plantation also soften the soil around plants to improve absorption of rainwater and fertilizers, said Doan Van Thang, 39.

Tran Thi Huong, a tenant farmer who works in another plantation 20 km from Pleiku, Gia Lai’s capital, resorted to using more water than usual.

Thanks to abundant reserves from canals built by local authorities, she could keep her plants sufficiently irrigated during the heatwave.

Coffee cherries are smaller than in previous years, but she expects the overall output to be unaffected. It also helped that she timely intervened with biopesticides against bugs that were more numerous than usual because of the extreme weather.

That is in line with the forecast from the US Department of Agriculture which estimates Vietnam’s next harvest would be roughly steady versus the current season’s output — far less pessimistic than domestic projections.

Whatever the impact on the harvest will be, coffee prices for drinkers around the world are likely to rise. Wholesale prices in Vietnam and London-traded robusta futures have risen to record highs earlier this year mostly after an underwhelming harvest in Vietnam and because of fears over the country’s next harvest after the drought, according to multiple traders and analysts.

Record wholesale prices have so far had a limited impact on consumer prices, with coffee inflation up by only 1.6% in the 27-country European Union (EU) in April, according to the latest Eurostat data, and 2.5% in robusta-loving Italy.

While well below price rises from a year earlier, it was higher than 1% in the March EU reading, a sign roasters may have started to pass their higher costs on consumers.

Besides, worries about Vietnam are far from over, as insufficient rains after the drought or excessive downpours before the upcoming October harvest season could further reduce output, warned a Vietnam-based trader.

The high wholesale prices may also be there to stay, as robusta demand is growing globally and farmers have boosted their leverage in the current circumstances, with many having also replaced coffee plants with pungent smelling durian, a tropical fruit experiencing huge demand in China.

“They have the financial ability to hoard and hold on to goods, so they will not be in a hurry to sell,” said Le Thanh Son, of Simexco, one of Vietnam’s biggest coffee exporters. — Reuters

Maharlika 2: This time, PhilHealth members are the victims

July 1, 2024 | 12:03 am

Remember Maharlika?

I refer to the Maharlika Wealth Fund or Maharlika Investment Fund, now formalized in Republic Act No. 11954. It, especially its original version, was met with widespread and staunch opposition, forcing the proponents to retreat and make concessions.

The proposal was eventually passed by both Houses of Congress, but what the legislators approved was different from the original version. Congress struck out the ugliest provisions found in the original bill. So, the Maharlika we have today is less monstrous than the original bill. But it is still ugly.

The most controversial, most objectionable provision of the original Maharlika was having financial institutions like the Social Security System (SSS), the Government Service Insurance System (GSIS), the Bangko Sentral ng Pilipinas (BSP), the Development Bank of the Philippines (DBP), and the Land Bank of the Philippines (LANDBANK) transfer a substantial amount of their funds to capitalize Maharlika.

That would impair the operations of the financial institutions in fulfilling their core mandates. And for SSS and GSIS, that would have meant going into uncharted waters and exposing the contributions of members to unjustified elevated risk.

But because of the ensuing firestorm, Congress excluded the SSS, GSIS, and the BSP from contributing to Maharlika’s startup fund. Sorry for DBP and LANDBANK. Consequently, DBP and LANDBANK had to seek regulatory relief from the BSP because their capital infusions into Maharlika resulted in non-compliance with their minimum capitalization requirements.

Maharlika continues to haunt us. Now, a Maharlika 2 has reared its ugly head.

This time, the Maharlika is expressed through a provision in the Fiscal Year (FY) 2024 General Appropriations Act (GAA), stating that excess fund balances of Government-Owned and/or -Controlled Corporations (GOCCs) can become the funding source for Unprogrammed Appropriations (UA).

Unprogrammed Appropriations, to quote the Department of Budget and Management, “are standby appropriations outside the approved government fiscal program….” As such, they “are not automatically allocated, and can only be released if several funding conditions are met, such as when the government… is able to collect excess revenue in the total tax revenues or any of the identified non-tax revenue sources from its revenue target, or new revenue from new tax or non-tax sources, or should foreign or approved financial loans/grants proceeds are realized.”

But unlocking the funding for the UA faces problems. The administration frowns upon increasing taxes (even refusing efficient ones, which have popular support like the sin taxes). And excess revenue from current taxation is unlikely as the Bureau of Internal Revenue (BIR), despite serious effort, is struggling to meet its collection target for 2024. Excise tax collection, for example, is below the target.

Hence, the resort to an “innovation,” which is to obtain the excess fund balances of GOCCs. This is a Maharlika redux.

GOCCs are constrained by their own charters. Some able to generate surpluses may need those funds for their future upkeep or investments to meet their goals. In other words, GOCCs have different specific characteristics, and thus a cookie-cutter approach by the National Government to extract excess funds from them is unsuitable, harsh, and inconsiderate.

And there is one GOCC whose mandate is to spend the funds it gets on its members. Surpluses should not be diverted elsewhere. We refer to the Philippine Health Insurance Corp. or PhilHealth.

But a Department of Finance (DoF) Circular (numbered 003—2024) regarding the fund balance of GOCCs argues otherwise. The DoF is being directed by the FY 2024 GAA, specifically Section XLIII (1) (d) on Unprogrammed Appropriations, to issue the implementation guidelines for the financing of UA sourced from the “[F]und balance of the GOCC from any remainder resulting from the review and reduction of their reserve funds to reasonable levels taking into account the disbursement from prior years.”

In pursuit of the above, the DoF Circular targets the excess funds of PhilHealth. The basis is that PhilHealth’s reserve fund by 2023 stood at P463.7 billion, and premium income since 2018 has substantially exceeded benefit claims and operating expenses. A further basis is that between 2021 and 2023, the cumulative unutilized government subsidy for the indirect contributors amounted to P89.9 billion. (The indirect contributors consist of indigents, beneficiaries of the Pantawid Pamilyang Pilipino Programs, senior citizens, persons with disabilities, Sangguniang Kabataan officials, individuals identified at point-of-service or those sponsored by local governments and other Filipinos aged 21 years old and above without capacity to pay premiums.)

The DoF arguments, which proceed from the above, are summarized as follows:

1. The unspent money is a benefit denied to Filipinos, and the unused subsidies have opportunity costs in terms of funding unappropriated programs.

2. The National Government, the DoF claims, “is in a better position to effectively utilize the unused subsidies for programs that directly and immediately benefits (sic) the Filipino people.

3. The National Government in the future has the flexibility to increase subsidies once PhilHealth has shown the capacity to speed up the use of its huge reserves for benefit payments.

4. Using the unutilized National Government subsidies to fund UA is a disciplining mechanism for PhilHealth “to use the funds or lose it.”

But here’s the rub: The DoF Circular is violating the law and is undermining Universal Health Care (UHC) for all Filipinos.

But let’s review Chapter III (National Health Insurance Program), Section 11 (Program Reserve Funds) of Republic Act No. 11223 (An Act Instituting Universal Health Care for all Filipinos):

“That whenever actual reserves exceed the required ceiling at the end of the fiscal year, the excess of the PhilHealth reserve fund shall be used to increase the Program’s benefits and to decrease the amount of members’ contributions.” (Underscoring mine.)

In short, the reserves PhilHealth has accumulated that “exceed the ceiling equivalent to the amount actuarially estimated for two years’ projected Program” must be used to increase benefits or services and reduce members’ contributions. The subsidies cannot be used for other purposes, like what the DoF Circular wants to do.

It must likewise be clarified that the government subsidies to PhilHealth are for the indirect contributors, mainly the poor. Thus, removing the subsidies to them is tantamount to degrading the indirect contributors.

The funds from the direct and indirect contributors are pooled to benefit everyone. The pooling of funds is an expression of solidarity. Pooled funds from the direct and indirect contributors likewise create economies of scale and strengthen government, including PhilHealth, to become a national strategic purchaser of health services. This results in reducing costs, achieving efficiency, and enhancing cost-effectiveness. In this regard, pulling out the subsidies to indirect contributors hurts everyone— not only the indirect contributors but also the direct contributors.

The DoF Circular also violates another law, Republic Act No. 11467, which earmarks revenues from sin taxes to the implementation of the Universal Health Care Act of 2019 (Republic Act No. 11223). Section 288-A of Republic Act No. 11467 stipulates that 60% of the total revenues from excise taxes on alcohol shall be earmarked for UHC, which includes PhilHealth contributions. For the tobacco excise tax, half of the revenues are earmarked for health, in which 80% of the health earmarking goes to PhilHealth.

Another law, Republic Act No. 10963 (or the TRAIN Law), mandates that from half of the excise taxes collected from sweetened beverages, 80% shall be designated to PhilHealth.

Said differently, the said laws which subsidize PhilHealth prevent National Government from using the earmarked revenues for other purposes.

To be sure, the PhilHealth leadership must be made accountable for its gross negligence and incompetence for not using PhilHealth’s substantial excess funds to increase the benefits and services for its members and reduce the members’ premium payments. But the DoF must likewise be called out for mocking existing laws, undermining PhilHealth’s mandate, and hurting the health interests of all Filipinos, all members of PhilHealth.

The DoF Circular must be exposed as a new but still ignominious Maharlika, a Maharlika 2. All members of PhilHealth, the media, and Congress must politically and legally challenge the DoF Circular and push it back.

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

ACEN to power ADB headquarters with 100% RE

July 1, 2024 | 12:03 am

AYALA-LED ACEN Corp.’s supply retail arm has signed a deal with the Asian Development Bank (ADB) to power the latter’ headquarters in Mandaluyong with 100% renewable energy (RE).

ACEN Renewable Energy Solutions will power ADB’s facilities using renewable energy from its portfolio, including solar and wind sources, it said in a statement on Sunday.

“As Asia and the Pacific’s climate bank, ADB is committed to lowering its carbon footprint. This includes sourcing electricity from renewable energy sources such as solar and wind,” said Bruce Gosper, ADB vice-president for administration and corporate management.

Lakshmi Menon, ADB director general for corporate services, said that the development bank has continued to source power from renewable energy sources since 2014 as part of its sustainability efforts.

“ADB has been instrumental in driving the growth of our renewable energy portfolio in the Philippines and around the region through sustainable financing,” ACEN President and Chief Executive Officer Eric T. Francia said.

ACEN currently holds about 4.8 gigawatts (GW) of attributable renewables capacity in operation and under construction, as well as signed agreements and won competitive tenders worth over one GW.

With this, the company said it has already effectively surpassed its original goal of reaching five GW of renewables by 2025. — Sheldeen Joy Talavera

Financial firms grappling with AI’s gifts and perils, execs say

July 1, 2024 | 12:02 am

CHICAGO — The spread of artificial intelligence (AI)-based systems offers big opportunities for financial services firms, executives say, but asset managers also face higher stakes than other consumer-facing businesses because they manage sensitive information.

For example, AI systems could be better than humans at explaining to clients why they arrived at recommendations like portfolio allocations or lending decisions, said Zack Kass, a former head of business partnerships at OpenAI. People, he said, are not good at explaining subconscious biases that could affect such decisions.

“AI should make that a ton better. The problem is, if we’re not careful, it will just make it worse,” Mr. Kass said at an investor conference staged by Morningstar last week in Chicago where the rise of AI systems was a frequent topic of discussion.

In theory AI, will simplify many routine tasks like filling out compliance forms or developing portfolios that are not so complex, leaving financial professionals more time to focus on human interactions or problems that require deeper thinking, said several investors and technology experts.

“There are some things that the machines could smooth over, and then a financial adviser could spend more time servicing their client,” said Karen Zaya, a Morningstar senior research analyst who follows investment managers’ use of technology.

But the depth of human interactions with AI will vary, she said. While AI-powered chatbots have become common for tasks like helping to choose an airline seat or to check a bank account balance, she said, the variables are much more complex for things like arranging investments in a retirement plan.

“I don’t think that’s on the agenda for the industry right now,” Ms. Zaya said. “All these firms we’ve spoken with are being very thoughtful and careful in how they implement these things. They want to be very considered.”

US regulators are seeking public comments about the use of AI by financial companies, looking to promote inclusive and equitable access to their services. Treasury Secretary Janet Yellen warned last month that the use of AI in finance could lower transaction costs but comes with “significant risks.”

The spread of AI could tempt companies to cut jobs in areas such as at call centers or in software-development facilities, but it is still likely they will need human workers to handle more complex questions, said Margaret Vitrano, portfolio manager for ClearBridge Investments.

“AI could be used to develop code, but that doesn’t mean you lay off all your developers. Maybe you use it to develop the first pass of code, and then you still need someone who’s sophisticated and knows code to look at it and say, let’s think about the user experience here,” Ms. Vitrano said.

Brenda Ingram, a Chicago-based financial adviser, said she hopes AI systems could save time and expenses on preparing things like compliance reports.

“The mundane, if you can get the AI to do it, I think we’re going to like it,” she said. — Reuters

Accelerating Asia Ventures looks to invest in 10 high-growth startups by 4^th quarter of the year

July 1, 2024 | 12:02 am

Singapore-based venture capital accelerator Accelerating Asia Ventures has officially opened applications for the 10^th Cohort of its flagship accelerator program — a milestone achievement for one of the longest running regional accelerator-VCs.

With a portfolio of over 80 startups, the flagship 100-day accelerator has helped many startups achieve significant growth. Startups accelerated have collectively raised over US$64 million in funding and seen on average a 300% growth in their business during the 100-day program.

Founded by Amra Naidoo and Craig Dixon in 2018, Accelerating Asia Ventures invests up to US$250,000 in each startup accepted into the program. Apart from the investment and the program, successful startups gain access to qualified mentorship opportunities, access to a global network of investors and industry experts, access to private portfolio investor networking events and join a thriving alumni community of over 150 founders.

Accelerating Asia Ventures works closely with angel investors, family offices and other institutional investors who are looking for diversified investment opportunities into early-stage startups. Through the accelerator program, the Accelerating Asia Ventures team works hands-on with these startups and provides opportunities to investors, benefiting both startups and investors in our network.

Accelerating Asia Ventures identifies startups with tech-based solutions, revenue and early traction; that are in high-growth, underserved Southeast Asia and South Asia markets; and are falling in the seed-pre-series A funding gap.

“Accelerating Asia Ventures is the Y Combinator of Southeast Asia, with a more relevant program for Founders in the region. After the accelerator we were better able to focus on building and scaling our business,” said Anggia Meisesari, co-founder of TransTrackID in Indonesia.

“The Accelerating Asia Ventures team helped us sharpen our messages and approach to fund-raising and to accelerate our growth. The program is tailored to the needs of each startup, so people that go through the program get maximum benefit for their stage,” added Tim Davies, co-founder of Waitrr, based in Singapore.

“Accelerating Asia Ventures successfully melds a highly skilled and passionate team who are not hesitant to share their knowledge, a smart and engaging accelerator program with useful startup resources, and a strong network of investors, mentors and alumni,” noted JT Solis, co-founder of Philippines’ very own Mayani.

“We really like the no-nonsense approach that was the key thing, and the second was the help with fund-raising. The reason we joined the accelerator was because we are first-time founders. There are a lot of things, we don’t know what we don’t know, and that is the gap we wanted to bridge with the accelerator program,” said Dirk-Jan ter Horst, co-founder of Drive-Lah.

“[While] there is a ton of generic information available about running a startup, at Accelerating Asia Ventures the focus is on immediately actionable tactics,” Project Pro Co-Founder & CEO Binny Mathews added. “It also really helps that the Accelerating Asia team is a set of people who genuinely want us to succeed so they are hustling for us every day.”

In Accelerating Asia Ventures’ accelerator program, cohorts set the goals and priorities for the week; review progress from the past week; gain insights from fellow founders and leverage the knowledge, power and value of the cohort.

There are also master-classes with mentors, each of which are tailored to address the needs of the cohort, from SEO deep dives to financial modeling and capital-raising. These are coupled with customized one-to-one sessions with entrepreneurs-in-residence for deep dives on fund-raising strategy, business models, growth loops and product, and storytelling and pitch coaching designed to better communicate startups investor value proposition.

The accelerator program also offers operational support to ensure startups from all markets across the region have solid company and governance practices to make them international investor-ready.

The program also connects and introduces cohorts to active angels ready to invest now and later-stage VCs to shore up opportunities for follow-on investment.

For any startup looking to apply to the program, a webinar is set on July 3, where Accelerating Asia Ventures’s Co-Founder and General Partner Amra Naidoo will answer questions in an “Ask Me Anything” session. Interested participants may visit https://www.acceleratingasia.com/events/ama-with-amra-naidoo to register.

The application deadline for Cohort 10 is July 5. Interested applicants may submit by visiting https://www.acceleratingasia.com/programs/accelerating-asia-flagship-program.

Rustan’s: Taking care of men (and local designers)

July 1, 2024 | 12:02 am

WHILE Father’s Day has come and gone, Rustan’s still has a lot of treats for daddies.

At a belated Father’s Day event on June 27 (Father’s Day was on June 16), the luxury retailer styled politicians and former basketball players Franz Pumaren and Mikee Romero (as well as restaurateur Rikki Dee). The styling event was also a way to launch the new Men’s Floor, at the second floor, as part of the ongoing renovations of Rustan’s flagship Makati store. The new beauty floor on the first level was launched just last year, and there will be more to come.

Jackie Avecilla, Head of Marketing for Rustan’s pointed out the new brands occupying the men’s floor. While local designer RJ Santos’ brand, Randolf Clothing, was onboarded a few years ago, his fellow Filipino designers Kelvin Morales, Viña Romero, and Christian Edward Dalogaog (through brand Ched Studio) have also joined the roster. “Our goal is really to highlight these local designers. At the end of the day, they’re really very artistic and creative. What better way to highlight them than here?,” said Ms. Avecilla.

She also pointed out the various new brands from around the world that they have started to carry in the store, such as Canadian brand Psycho Bunny and American brand Faherty. Not exactly household names, but, “The goal is to launch many more niche brands. A lot of men don’t like wearing the common ones that you see — and fast fashion,” she said. “The pieces are unique; they’re also very limited. You’re sure that what you’re wearing is one-of-a-kind.”

While Ms. Avecilla acknowledges that a lot of Rustan’s customers are women (as evidenced by the large beauty floor below), there’s always room for the men. “This used to be a women’s section also,” she said about the second floor. “But the space was carved out to now be a men’s section. We know that men, of course, they want to see collections that are really for them. Yes, our shoppers are predominantly women, but we do realize that there’s a lack of men’s fashionable brands in the Philippines.”

The next stage of Rustan’s renovations will be seen in the Home department. “We believe in Filipino talent; not just in fashion, but also in home. That would be next. This stems from the desire of our founders, where they really took pride in local artisans and craftsmanship,” said Ms. Avecilla. Designer Kenneth Cobonpue already occupies a space upstairs; more local designers and brands will follow.

“Where else can you find such good talent?,” she said. — Joseph L. Garcia

US food safety regulators expand bird flu testing in milk products

July 1, 2024 | 12:02 am

THE US Food and Drug Administration (FDA) has begun testing more dairy products for evidence of the bird flu virus as outbreaks spread among dairy herds.

More than 120 dairy herds in 12 states have tested positive for bird flu since March, according to the US Department of Agriculture (USDA). Federal officials have warned that further spread among dairy cows could heighten the risk of human infections.

The risk to the general public from bird flu remains low, federal officials have said, though it is higher for workers on dairy farms, who should wear personal protective equipment to reduce the risk of infection.

The focus of additional testing, which will sample 155 products, is to ensure that pasteurization inactivates the virus, said Don Prater, acting director of the FDA’s Center for Food Safety and Applied Nutrition, on a call with reporters.

Prior FDA testing of 297 retail dairy samples came back negative for evidence of the virus. The agency continues to strongly advise against consumption of raw milk products, Mr. Prater said.

No infected dairy cow herds are known to be contributing to the raw milk supply, said Eric Deeble, USDA’s acting senior adviser for its bird flu response.

More than 690 people who were exposed to infected or suspected infected animals have been monitored for flu symptoms, and 51 people who developed flu-like symptoms have been tested, Demetre Daskalakis, director of the US Centers for Disease Control and Prevention’s (CDC) National Center for Immunization and Respiratory Diseases, said on the press call.

Three dairy farm workers have tested positive for the virus with mild respiratory or conjunctivitis symptoms, and all have recovered.

The CDC is providing technical support to the state of Michigan as it begins serological testing of farm workers for signs of prior infection by the virus and will ensure the testing can be completed in other states, Mr. Daskalakis said.

The USDA is conducting research on how dairy cattle contract the virus through contact with infected milk or respiratory droplets, Mr. Deeble said.

The development of a bird flu vaccine for dairy cows “is going to take some time,” and the agency hopes to eradicate the virus in dairy cattle without the use of a vaccine, Mr. Deeble said.

Agriculture Secretary Tom Vilsack told Reuters on June 12 that the agency is in talks with two dozen companies on the development of a bird flu vaccine for cattle. — Reuters

A step back to move the business forward

July 1, 2024 | 12:02 am

business-person-futuristic-business-environment — FREEPIK

“Slow down to speed up,” my physical therapist admonished me once, as I injured myself by walking fast and not listening to my body.

This principle of halting the rush also rings very true in the world of business. Leaders are often caught up in chasing after sales targets and implementing initiatives. Amid fierce competition, cost pressures, and rapidly shifting customer preferences, much of an organization’s energy must be put into delivering commitments, and rightly so.

But then, we all hit a wall. My foot gave in after I pushed myself too hard in exercising. For companies, the manifestations are team burn-out, budgets that are maxed out yet the top line and bottom line results are not coming in. All too often, the default response is to work harder or cut budgets, which often leads to counterproductive results. Then board members or shareholders demand clearer explanation and results turnaround ASAP.

“Slow down to speed up” for businesses means that the leadership team must take time off — yes, precious time — to step back and analyze the business.

This is a period to objectively look at what’s working and what’s not. What drives success and the reasons for failure. To get objective data on whether customers still find their product or service relevant, or different enough versus the many other alternatives. To assess competitive position. To forecast what’s up ahead.

These business reviews are standard fare among multinationals and some of the large local companies. From these business reviews, debates on what the better strategy is ensue, and what plans will bring these to life. Budgets are then based on the prioritized plans.

The majority of companies, however, do not invest the time and effort on this “slowing down.” One culprit, as we learned from several home-grown companies, is that the entrepreneurial approach of the founder/s takes precedence over any structured planning process. Most decisions on strategy and plans emanate from a top-down direction — and why not? After all, this is fast, efficient, and the bosses know what’s best anyway, right?

What get compromised in this top-down approach are aplenty. The leaders and managers who get to experience the nuances of the day-to-day business — on what works, what doesn’t, the challenges, the strengths versus the competition — do not get to participate in the thinking process and are not able to bring up all their inputs. And because they were not part of the process, there is hardly any buy-in nor accountability to the resulting plans.

Culturally, we defer to authority, and thus Filipino managers would often say, “sige boss, kaya ’yan.” But then, when the going gets tough and the plans don’t work, they will just rant on the side and drag their feet in execution. And the cycle of non-performance begins.

What’s an alternative? An iterative top-down and bottoms-up approach.

Founders, shareholders, and boards definitely must express their expectations of the business, and the financial results that the leadership team must deliver. Then the rest of the leadership team, and their key managers, must be involved in both the business reviews and in strategy development. This process must be data-driven and rigorous, and thus cannot be just a one-off, ill-prepared, planning-cum-team building session. There must be respectful debates once a data-based business review is underway. In these debates, everyone should wear a company hat versus a siloed mindset.

Strategies must be chosen based on a thorough identification of what truly drives the business, asking themselves, “What really, really moves the needle?”

Often, “presentations” are confused with strategy discussions. The danger with presentations is that the leader would default to justifying their plans or initiatives, without the proper and objective evaluation on whether it worked or not. They hardly review results versus commitments.

This is why in strategic planning, it is worthwhile to tap external facilitators, those with expertise on structuring the overall process, the business reviews, and the strategy discussions — to come up with a rigorous analysis, to facilitate debates, and to sharpen the thinking. Importantly, objectivity is then infused into all the discussions. The leaders are then guided to make choices based on objective data, broad-based leadership input, and robust basis for investment decisions.

“Slow down to speed up” is a must for all businesses wanting to have a healthy, sustainable future.

Pauline Fermin is the president and CEO of Acumen Strategy Consultants, which provides advisory services to Top 100 corporations in the Philippines in the areas of corporate strategy, marketing, and brand strategy, organization transformation, and capability building.

www.acumen.com.ph

BSP survey: Consumer spending less upbeat in Q3

July 1, 2024 | 12:02 am

In the third quarter, Filipino consumers are expected to reduce their spending based on the results of the central bank’s second-quarter Consumer Expectations Survey (CES). The conﬁdence index (CI) on consumer spending for the next quarter fell to 39.6% from 41.3% previously. Consumers will spend less on food, nonalcoholic and alcoholic beverages, and tobacco (60.6% from 63.7%), fuel (47.8% from 50.8%) and transportation (41.3% from 42.9%), among others. Meanwhile, consumer spending will increase in electricity (61.6% from 61.4%), water (44.9% from 44.3%), and personal care and effects (39.6% from 36%), among others.

Comfort zone

July 1, 2024 | 12:02 am

VELO_PAGE1_image1 — PHOTO BY KAP MACEDA AGUILA

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The well-specced GAC M6 Pro presents a serious challenge for the usual suspects

By Kap Maceda Aguila

A DRIFT TRACK is quite an exciting place to be, if you’re looking forward to gawking at — if not experiencing for yourself — dynamic driving. Everyday driving on usual routes should be a cinch for all vehicles worth their salt; but it is through pushing beyond the average that one gets a better idea of how well an automobile is put together.

That’s exactly the idea behind GAC Motor Philippines’ recent drive to highlight its M6 Pro multi-purpose vehicle (MPV).

Of course, dynamic driving — let alone a drift track — are not the usual concepts associated with MPVs, which are more known as point-A-to-B conveyors while offering comfort and varying levels of convenience (and luxury). So there was some incredulity with the decision of GAC Motor Philippines in choosing the R33 Drift Track in San Simon, Pampanga to showcase its M6 Pro seven-seater van to three batches of the press and content creators.

Ahead of the drive, GAC Motor Philippines Brand Head Franz Decloedt, in an exclusive interview with “Velocity,” reported on Astara Philippines’ growing business with the Chinese brand. “There’s great momentum that we’ve been experiencing since our first year with GAC. We ended 2023 with sales of almost 2,000 units; that’s almost 350% growth. This year, we’re continuing that momentum. By the end of May, we had already sold 1,351 units for the year. That means we’re almost at our 2023 levels. Growth is at 204%. GAC here is now the fastest-growing brand in the industry among all brands.”

When Astara Philippines took over the GAC distributorship at the end of 2022, the brand had six dealerships in its network. At the close of 2023, that number grew to 20. Today? “We’re currently at 26 operating dealers,” reported Mr. Decloedt, and he expects to get that total up to as many as 38-strong before the year is done and dusted. “We are blessed that a lot of new partners are wanting to carry the brand,” he insisted.

Right at the core of GAC’s success heretofore in the Philippines is, of course, its product mix — led in sales by the GS3 Emzoom subcompact crossover. Astara Philippines recently reported that the model breached 1,500 units in sales since its launch in June of last year. A source revealed that it accounts for up to 40% of local sales for the brand.

“There is so much more to offer in the MPV segment,” said Astara Philippines Training Head Dong Magsajo at R33. “This set of training exercises which consists of hard braking and maneuverability exercises in a proper track are enough to show that we have some advanced safety features that might not be standard, or not what people might expect in an MPV. Primary in anyone who buys a vehicle for the family is safety, so we chose to highlight that — on top of the comfort and tech features and the styling of the M6 Pro.”

The GAC M6 Pro is priced at P1.23 million for the GS variant, and P1.598 million for the GL. The latter is fitted with — among other niceties — a slew of advanced driver assistance system (ADAS) features. Both trims are powered by a turbocharged 1.5-liter mill delivering 174hp and 270Nm.

“We have one of the biggest entry access points,” stressed Mr. Magsajo, referring to the large rear doors which allow ingress for the second-row captain’s chairs, along with the third-row bench seats. GAC also has an elegant way of accessing the last row. “You can actually go through the middle of the two captain’s chairs,” he said, which means there’s no need to move the second-row chairs — though the armrests need to be lifted up for greater convenience.

There’s another interesting feature in the GAC M6 Pro that yields benefits for its users. The spare tire lies under the floor just behind the first row. “That means you don’t have to go underneath the car to access it,” said Mr. Magsajo. Another advantage with this move of the spare is that it frees up the rear compartment for more cargo space.

The seven (in 2+2+3 configuration) seater competes with several more established brands in the segment, and GAC Motor Philippines hopes that highlighting its set of features, as well as flexing its abilities through activities like our own drift track experience, will make car browsers take a closer look.

Speaking of, lead instructor Georges Ramirez and his family of motoring experts guided our group of media practitioners and content creators through an interesting course at the R33. Several exercises were designed to push the M6 Pro and see how it behaved in emergency situations.

In one exercise, we brought the MPV to a speed of about 60kph, made a turn, and then stepped hard on the brakes to see how the vehicle would behave. It stayed firm and unperturbed through the maneuver.

Another exercise was the so-called moose test, named thus because it warrants a sudden lane change, without time for braking, when an obstacle — such as, yes, a moose (in certain territories, of course) — suddenly appears on the road. You can feel intervening features (notably the electronic stability program) in the vehicle that enable the driver to focus solely on avoiding the obstacle.

Meanwhile, a soapy strip of linoleum was used to demonstrate the traction control on the M6 Pro. Even when the left tires went through the slippery surface (while the right tires were planted on the cement), the vehicle didn’t panic, and regulated the delivery of power and traction in an orchestrated fashion to keep the M6 Pro unbothered.

A test of the Surround View Camera System (available on the higher GL variant) revealed how much easier it is to maneuver and park the vehicle through aids like alerts and moving guidelines on the 10.25-inch infotainment touchscreen.

For GAC, it’s about ticking the boxes not normally ticked — and at lower price points. But the brand is, at the same time, keen on conveying a more upmarket quality to its offerings.

Stressed Mr. Magsajo. “We have, for example, the GS8 and the M8. These are vehicles that, once you actually go to the showroom, see them and test-drive them, will completely blow you away. You will understand, the moment you sit on those seats, how different the entire experience is. They’re huge, but they’re also packed with technology and features that you would expect from established brands.”

He concluded, “We’re not here to be mediocre. We’ll give you the best value for your money, regardless of your budget. That’s how we look at our role in this entire thing.”

NexGen Energy obtains SEC permit to sell for IPO, starts offer period

July 1, 2024 | 12:02 am

NEXGEN Energy Corp. has obtained approval from the Securities and Exchange Commission (SEC) to sell its initial public offering (IPO) shares, with the offer period set to begin on Monday, July 1.

The SEC permit to sell is one of the regulatory approvals needed to list the company’s shares on the Philippine Stock Exchange (PSE), NexGen Energy said in an e-mailed statement over the weekend.

The company obtained regulatory approval from the PSE on June 24 to list its shares.

The IPO comprises 300 million primary common shares and an overallotment option of up to 45 million secondary common shares at P1.68 per share.

The offer period will run from July 1 to July 8, with the listing date set for July 16, as detailed in the company’s final prospectus dated June 27.

NexGen Energy’s shares will be traded on the PSE’s small, medium, and emerging board.

NexGen Energy will become the third company to go public in 2024, following OceanaGold (Philippines), Inc. and Citicore Renewable Energy Corp.

Chinabank Capital Corp. acts as the sole issue manager, joint lead underwriter, and sole bookrunner, with Investment & Capital Corp. of the Philippines serving as joint lead underwriter.

Specializing in wind and solar energy, NexGen Energy currently operates three solar farms and has a pipeline of over 1.5 gigawatts in wind and solar projects.

It is a wholly owned subsidiary of Pure Energy Holdings Corp., an investment holding company engaged in renewable energy, bulk water, distribution, and septage facility.

Among its sister companies are Repower Energy Development Corp. and Tubig Pilipinas Group, Inc., which develops, owns and operates eight run-of-the-river hydropower plants and 13 bulk water, distribution and septage facilities, respectively.

NexGen Energy will also develop power facilities for Pure Energy in relation to this venture into agricultural technology, specifically climate-controlled indoor farming. — Revin Mikhael D. Ochave